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Who are the new would-be owners of the Padres, and are they fit to own the team? Recent documents unearthed from city hall under the California Public Records Act suggest that City officials may not be doing enough to find out.

The public face of the Padres’ new ownership is ex–sports agent and former Arizona Diamondbacks co-owner Jeff Moorad. But Moorad has declined to say who else is buying the team with him.

The question of ownership is critical to San Diego taxpayers, who subsidize Petco Park to the tune of $11 million a year, as well as to baseball fans, who want to make sure the new owners have enough money to build a winning team.

The need for information has become more urgent as rumors have grown about whether Moorad and his unidentified partners have the financial wherewithal and business acumen to run a successful team over the long run.

But does the City even have the right to ask about such matters? Section 13.3 of the Petco Park Joint Use and Management Agreement between the City and Padres, L.P., dated February 1, 2000, addresses that issue:

“The Padres have the right to transfer ownership of the Padres’ franchise during the Term to the extent permitted by Major League Baseball, without the City’s consent; provided, however, that in connection with such sale, the new franchise owner must (i) concurrently acquire all of the Padres rights and obligations in, to and under the Franchise and this Agreement, and (ii) concurrently agree in writing, in form and substance reasonably acceptable to the City, to assume all of the Padres’ obligations under this Agreement for the remainder of the Term.”

That seems simple and reasonable enough. The new owners, whoever they are, must furnish the City with a signed statement agreeing to shoulder the same financial obligations to San Diego taxpayers as the previous owner, John Moores, had agreed to. If they don’t, there’s the very real possibility that they might walk away at any time, leaving the taxpayers high and dry.

But the new owners may not be asked to make that written commitment. In a letter dated February 17, Katherine K. Pothier, executive vice president of the Padres, asserts that “neither Section 13.3 nor Section 28.17 applies to the Transaction.”

She goes on to say, “The Transaction involves the sale of partnership interests in the Padres, which will continue to own, operate and manage the Franchise. There is not and will not be any new franchise owner or entity to assume obligations under the JUMA.”

In other words, Pothier, a lawyer, makes a lawyerly argument that Padres L.P., a Delaware limited partnership that technically owns the Padres franchise, remains the owner of the team — even though the partnership’s old owners are being exchanged for new owners, as yet to be identified.

At the bottom of her letter, Pothier provided a signature line for the City to attest that it has “Accepted and Approved” her interpretation of the contract. On the copy of the letter furnished by the City that line remains blank.

If Pothier’s interpretation prevails, the City won’t be able to find out anything about the financial wherewithal and business reputation of whoever is buying the team. Will the City take on the Padres and its new buyers in order to defend the integrity of its agreement with the team?

Apparently the jury is still out.

There is one more wrinkle. The city charter contains Section 225, which requires that anybody doing business with the City must make complete disclosure of the names and identities of those direct and indirect owners.

Tim Moore, City ballpark administrator, says the City hasn’t yet decided whether it will invoke Section 225 and ask for that information.

“No transaction has taken place yet,” Moore said in a telephone interview last week. “It [Section 225] may not be relevant to this transaction.” City emails released under the Public Records Act show that Padres vice president Pothier has been lobbying hard against any disclosure under Section 225.

In a February 12 email to Moore and deputy city attorney Brock Ladewig, she wrote, “I reviewed Section 225 of the City Charter and do not think it applies. The right and the lease have already been granted to the Padres L.P. and is not being altered. No additional rights are being granted. Padres L.P. continues to hold the interest.”

That drew a quick response from Ladewig. “Katie, I must respectfully disagree with your analysis. I believe new persons will be gaining some ‘right, title or interest arising out of a contract’ when the new partners are installed. If the issue becomes a problem, we can look at this more closely.” Reached by phone this week, Ladewig said he has had no further contact with Pothier.

Bruce Henderson, a former city councilman and longtime critic of the 1998 deal between the City and John Moores that created Petco Park and surrounding developments, says there is no question that Section 225 should be applied to the latest transaction.

“Section 225 is a very important rule that government is supposed to be following. Right in its title it says that it is mandatory. And the purpose of 225 is very simple: council members, the mayor, city staff should know whose economic interests are before them in order to be certain there is no conflict of interest, and the public needs to know the same thing, so if there is a conflict of interest they can blow the whistle on it.

“That’s why 225 was passed overwhelmingly by the voters in 1992. There was no real opposition to it. It was added as a charter amendment, not just a section of the municipal code but a mandatory provision of the charter.”

San Diego’s history of finance-related political scandals — including the Valerie Stallings case, in which the city councilwoman was forced to resign after receiving gifts from Padres owner Moores — makes enforcement of Section 225 critical.

“If something is going to be acted on by the city council, staff should at the very outset find out whose economic interests are directly or indirectly affected,” Henderson says. “That way as staff works on it and as the matter works its way up to city council, everyone knows whose economic interests are involved. If you get the disclosures right in the beginning it helps you avoid potential conflicts of interest.”

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Comments

monaghan March 25, 2009 @ 12:22 p.m.

Ohmigod, Bruce Henderson is baaack. Now that he's no longer working in the City Attorney's office under Mike Aguirre, he's delivering opinions again on Padres' issues for Matt Potter. I don't know if I'm glad or appalled....

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JustWondering March 25, 2009 @ 12:49 p.m.

I for one can't understand the reason for NOT disclosing who owners are and their percentage of ownership. Public money has been and is being used to make Petco Park available for use in one form or another. Public financing of the bonds that built Petco Park will be paid for years to come. Non-disclosure, if nothing else, gives the impression somebody has something to hide. In addition, when the Padres Executive Counsel and VP Katherine K. Pothier, works to develop novel interpretations of the law, just to keep ownership information under wraps, ALARM BELLS should be ringing loudly at City Hall.

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paul March 25, 2009 @ 2:40 p.m.

Matt, did the city ever apply Section 225 to Padres L.P. in the first place? My guess is that they probably didn't, or that if they did, the ownership was made up largely of other Delaware companies and that their ownership was not disclosed. I wonder how much of the Padres Valerie Stallings owns? (tongue firmly in cheek)

My understanding is that the city routinely does major business with Delaware companies and rarely invokes Section 225.

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rbrocker March 25, 2009 @ 3:50 p.m.

Paul

According to earlier stories from I believe MLB.com, The Mooreses reportedly own 90 percent of the team. Because of community property laws in California, Becky Moores shares 50 percent of that asset. Their daughter, Jennifer, owns five percent and the other five percent is owned by Glenn Doshay, a San Diego businessman

Strange thing is, when Alderson came about it was reported he would be a minority owner as well, of course he could have sold his share back.

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SanDiegoParrothead March 25, 2009 @ 4:19 p.m.

For those who would like to directly contact the crooks, er people, involved ...

Katherine K. Pothier kpothier@padres.com Tim Moore tcmoore@sandiego.gov Brock Ladewig bladewig@sandiego.gov

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Joe Poutous March 25, 2009 @ 6:48 p.m.

Monaghan, I had the same reaction to the news that Bruce is back.

Darn Bruce Henderson to heck. -Joe

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Fred Williams March 26, 2009 @ 12:57 a.m.

Tiki and Monaghan,

Are you forgetting that just about everything Bruce Henderson predicted came true?

He was vilified, practically run out of town for telling the truth...and you STILL want to blame him for what happened?

Please, direct your anger toward the owners of the Chargers and Padres, and the city staff and elected officials. They're the ones who lied to us, ripped off the city for hundreds of millions of dollars, and are now living in luxury because people like you refused to listen to Henderson.

Why do you think the city is bankrupt? It's precisely because of the deals Henderson opposed. For you to now ridicule him shows a complete lack of class or intelligence.

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JustWondering March 26, 2009 @ 10:57 a.m.

Have to second Fred on that one. While Bruce was a city councilman he did begin the processes that led to a waiver on secondary sewage treatment require by the EPA... Scientist at Scripps Institute of Oceanography still have their doubts on the usefulness of these treatment processes today. His lead save the taxpayers of San Diego BILLIONS in unnecessary costs.

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monaghan March 27, 2009 @ 2:25 p.m.

Fred, darling, do not misunderstand: I appreciate Bruce and most of his work, but enough already. Really. And much more interestingly, cooldude, what names for the stadium are you hearing?

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Joaquin_de_la_Mesa March 29, 2009 @ 1:49 p.m.

Why do I get the feeling that every time our city fathers have to deal with the Chargers and Padres that they're hopelessly overmatched. To paraphrase Dr. Evil, why must we be lead by freaking morons?

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SunnyGirl March 29, 2009 @ 1:54 p.m.

Why does it matter who owns the Padres?

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Joe Poutous March 30, 2009 @ 12:13 p.m.

Fred, you had me all the way up to the point that you called me a classless moron.

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SurfPuppy619 March 30, 2009 @ 12:14 p.m.

Classless moron is a term of endearment here :)

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SurfPuppy619 March 30, 2009 @ 12:19 p.m.

Tim Moore, City ballpark administrator, says the City hasn’t yet decided whether it will invoke Section 225 and ask for that information.

I hereby nominate Tim Moore, City Ballpark admin, as bonehead of the year.

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SurfPuppy619 March 30, 2009 @ 12:27 p.m.

Obviously those people with economic interests would like to keep things secret. They’d like to be able to stand in front of the council and say, ‘I’m just a concerned citizen, I have no economic interest whatsoever, I just want good government.’

“In fact, that’s the last thing they want, many of them. They want some special decision that will help them economically, and the public be damned. That happens all the time when you don’t have full disclosure.”

This is the exact same scenario that resulted in the federal corruption trial of Las Veags mob man Michael Galardi, Councilmen Ralph Inzunza and Michael Zucchet, lobbyist Lance Malone and David Cowan, a former aide to Councilman Charles Lewis- Lewis died awaiting trial.

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SurfPuppy619 March 30, 2009 @ 12:38 p.m.

I just emailed Katherine-lets see if she responds.

Dear Ms. Katherine K. Pothier:

Your comments and legal citations (supporting your position on the Padres L.P. documents which are currently pending before the City of San Diego) are urgently needed at the San Diego Reader website.

Please respond ASAP, I know I for one cannot wait to see your legal authority backing up and supporting your position.

Very Truly Yours,

SurfPuppy619

http://www.sandiegoreader.com/news/2009/mar/25/city-light-2/#comments

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Fred Williams March 31, 2009 @ 12:15 a.m.

Tiki, you know I've always been deeply attracted to your wit and classiness...

Now just agree that Bruce Henderson was right all along and we should accord him respect and admiration for persevering through all the sneers and trying to do what was best for our city.

The slime balls behind the Padres and Chargers ripoffs of this city have prospered with their lies and corruption. It's time we put the spotlight on them. What they cynically did to destroy a good man's reputation while fleecing the city makes an excellent case for why San Diego is in such trouble today.

Anyone who persists in blaming Henderson for our troubles is indeed both classless and moronic.

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Joe Poutous March 31, 2009 @ 6:14 a.m.

Fred, his style rubs me the wrong way... but OK.

Uncle.

  • Joe
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SurfPuppy619 March 31, 2009 @ 12:49 p.m.

Looks like Katherine K. Pothier is a no show.

Not surprising.

She is probably running for the hills (tail between legs) with her "confidentiality" claims right now.

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SanDiegoParrothead April 7, 2009 @ 11:39 a.m.

Give her time.

She's probably trying to come up with some typical lawyer-speak response.

SDPH

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